(Yicai Global) Oct. 14 -- Polestar, the performance electric vehicle startup owned by Volvo Cars and its Chinese parent company Zhejiang Geely Holding, is going after German rivals rather than Tesla, according to its chief executive.
“Polestar is a premium brand in competition with Mercedes, Audi and BMW,” Thomas Ingenlath told Yicai Global. The Sweden-based company is “definitely not in the same game as Tesla, reaching much more to the mass market.”
Ingenlath is visiting Polestar’s team in China to gain a better understanding of one of the world’s largest markets for new energy vehicles. He attended this year’s first auto show in Beijing two weeks ago after a 48-hour journey and a 14-day quarantine due to Covid-19 measures.
China’s auto market is the world’s biggest and is very competitive, with traditional car manufacturers such as Volkswagen on one side, and new energy startups like California-based Tesla and domestic players Nio and Xpeng on the other.
“We are combing the advantages of the startup and OEMs [original equipment manufacturers] into the Polestar brand,” Ingenlath said.
The three-year-old brand has the agility, innovation and speed of a small startup combined with a heritage of safety and high-quality from its parent company, he said in an interview on Oct. 12.
Polestar has two models for sale in its 23 global showrooms: the Polestar 1 plug-in hybrid, which has annual production of 500, and the Polestar 2 dual-motor variant of the all-electric Polestar 2 priced at CNY418,000 (USD61,990). The Polestar 2 will have a single electric motor option from next year to make it more affordable, Ingenlath said.
Asked whether Polestar will follow Tesla’s lead in cutting prices, Ingenlath said it would not. “We will not enter into the price war that exists in the mass market.”
The cost of a China-made Tesla Model 3 has been lowered to CNY249,900 apiece from an initial CNY363,900 through seven rounds of price reductions.
Deliveries of Polestar’s vehicles will start this year, with good demand in Norway, the Netherlands, Germany, Belgium and the UK, said Ingenlath. Deliveries in China and the US have started slowly but are expected to pick up and increase, he added.
Excerpts from the interview appear below.
Yicai Global: Tesla cut the price of its China-made Model 3 several times this year. Will Polestar follow? And will you be a niche brand or a brand targeted at the mass market?
Thomas Ingenlath: We are a premium electric car brand. We are definitely not in the same game as Tesla, reaching much more to the mass market, going into competition with brands like Volkswagen. Polestar is in competition with Mercedes, Audi and BMW.
We will definitely not be a kind of niche brand like Aston Martin, but will also not go into mass market competition like Volkswagen. You can compare Polestar to a certain brand like Porsche or Audi, though Audi has a large market share in China and it may take us years to have this kind of market.
We are a premium brand that will deliver product, convey our great design, great technology and our innovation. We will not enter into the price war that exists in the mass market.
YG: What are the advantages and disadvantages of Polestar compared with established carmakers like Volkswagen and new energy startups like Nio and Xpeng?
TI: You have the startup on one side and OEMs on the other side. We are combining the advantages of the startup and the advantage of the OEMs into the Polestar brand. We have the agility, innovation, the fast movement of a startup because we are a tiny startup company. But for the development of technology, we have history, safety, quality and experience with the background we have.
Being backed up by Volvo gives us incredible access to resources to get steps to quality and safety that are very difficult for a young fresh startup to have immediately available like we have it. So that is our competitive advantage.
On top of that, we want to be a fascinating brand with our design expertise, not just in China or in the US but in all three big markets. I think that's another very special thing about this European stand of Polestar.
YG: All Polestar 2 vehicles were recalled recently due to a software issue. What’s your take on that problem?
TI: I don’t think a safety recall is a special thing to electric cars. A safety recall, I think, is standard in this industry. We recalled 2,000 cars, and it is a relatively small number in the big world. This will be done very simply with a software update. And that’s how it works in all cars, cars with internal combustion engines or electric motors.
So the safety recall is, in my eyes, a very good news actually showing that we actually take very quick action and deliver quality products to our customers. That is where we really act very fast and get it right.
YG: Does Polestar have an IPO plan?
TI: As always, my answer is yes. The funding story of Polestar will develop, and you will see news about that within the coming 12 months. But this is something just like the growth that we talked about. Polestar as a company is not in a rush. We are not having to rush into an IPO.